The data raise as many questions as answers. Why did revenues rise faster than spending, and what happened to the difference? Why does, say, Western Michigan University spend 37.8 percent more per student than Central Michigan University, a school that most people consider similar to Western? Does the added per-student spending at Western lead to better student outcomes, and better jobs?

Are the enormous expenditures at U of M-Ann
Arbor justified? Are they out of line with other Big Ten research institutions,
such as the University of Illinois, Ohio State University and the University of
Wisconsin? If the education at Central Michigan, Oakland University and Grand
Valley State University is roughly comparable to Eastern or Western Michigan,
why cannot the latter institutions operate on a similar cost basis? Should
students attending institutions that are expensive to operate (especially the
University of Michigan) pay dramatically more than students attending other
institutions, even beyond the current tuition disparities? How does such
expensive education comport with a desire to provide access to students of
ordinary or limited means?

More generally, given that the state spends
more than $1.7 billion annually on operations at these institutions, is anyone
in Michigan analyzing these numbers to find answers to these and similar
questions? If not, why not? This is an especially important question to answer
when policymakers are being urged to spend even more as a means of generating
economic growth.

It should be added that the tables above just
scratch the surface of analysis that is possible with the available data. There
is some breakdown in the financial information by categories, and there is also
other interesting information on staffing levels and, at least inferentially,
salaries paid. Some preliminary analysis that we have done using national data
would indicate that, over time, the instructional function has been deemphasized at universities, that spending on administration has risen sharply[1] and that tuition fees actually more than cover faculty salaries. All of this cries out for greater analysis in the context of Michigan.